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Since its inception in 1983 up until 2004, the Georgetown University Alumni and Student Federal Credit Union had it fairly easy. As the only on-campus banking service, GUASFCU experienced consistent growth and expansion during its first 21 years in business. Then Chevy Chase Bank came to town.

In the summer of 2004, Washington metro-area banking powerhouse Chevy Chase opened a branch on campus, and the credit union met its first on-campus competition. That year, the credit union began to see a 10-percent decline in its asset levels.

Dan White (MSB ’09), the CEO of GUASFCU, said that the credit union wasn’t even aware a competitor was arriving in 2004.

“It came as a complete surprise,” he said. “The university didn’t tell the credit union.”

The newfound competition meant the credit union had to increase marketing ploys, and following Chevy Chase’s arrival, GUASFCU launched a series of changes and improvements.

In 2006, the credit union partnered with the Allpoint ATM network, which offers members access to 32,000 surcharge-free ATMs nationwide. White said joining the Allpoint network has been a huge selling point for the credit union because of Allpoint’s national coverage, but he said he does not discount their local disadvantage with Chevy Chase.

“Chevy Chase has better ATM access around D.C., which is a strong point over us,” White said. “Like, if a student is going out to lunch after a basketball game and is leaving the Verizon Center, they’ll probably have more Chevy Chase ATMs available to them.”

In addition to joining the Allpoint network, the credit union also added a bill-pay service, which allows members to pay bills online.

With this new system, payments can be set up on a recurring basis and the information of frequent people or businesses can be saved.

Another change was the upgraded transaction-processing system. White said this was more of an internal change with hundreds of subtle modifications that created an easier and more efficient software system for the tellers to use.

The most visible change was the branch renovations in 2006. The office was furnished with a new glass wall, cabinetry, chairs and television screens. White said the goal of the credit union was to make it easier for interns to work efficiently and also present a more professional look to their members.

GUASFCU also improved their internship application process, eliminated monthly fees for online banking and extended the lobby hours.

“When new competitors enter a market, the existing competitors are either inspired to be more creative and to achieve greater success, or the additional competition can reduce the commitment and discourage the existing firm,” David Walker, faculty adviser of the credit union, said. “In the case of GUASFCU, the competition from Chevy Chase has motivated new credit union services, such as nationwide ATM access and expanded lending.”

Chevy Chase does, though, match much of what GUASFCU has to offer. They both have ATM locations in O’Donovan Hall and the front lobby of the Leavey Center, and Chevy Chase even has an additional location on the back side of Leavey near their branch. Both banks offer virtually free banking, with no checking, online-banking, monthly or opening-account fees, as well as free debit cards and 24-hour cash access via ATMs.

The credit union, however, does not require any minimum fee to be maintained in a checking-account balance and allows members to receive the most competitive interest-rate returns on savings accounts starting at $10. Chevy Chase uses a tiered system with a required minimum of $250 – meaning the more money in the account, the higher the interest rate.

Thanks to the changes made by the credit union and other financial conditions affecting the commercial banking industry, including the subprime mortgage crisis, from which credit unions, as non-commercial institutions, are considered protected, GUASFCU experienced positive growth in 2007 for the first time since Chevy Chase came to campus, White said. Assets grew 18 percent from $8.3 million to $9.8 million from the end of 2006 to 2007, according to the 2007 GUASFCU Annual Report. The 2007 report also states that GUASFCU’s loan portfolio increased by 18 percent to a record of approximately $1.75 million. That year, the report stated, the credit union had become the largest student-run financial institution in the United States.

“The driving factor behind this growth was due to the marketing efforts of the credit union,” White wrote in the 2007 report. “The credit union worked with many groups to set up marketing initiatives for the first time at the Law Center, the Medical Center, the Office of International Programs and the [Office of Student Financial Services] in addition to our strong push at undergraduate New Student Orientation.”

Today, the GUASFCU Web site boasts that 70 percent of incoming freshmen bank with them. The credit union kicks off its year with its primary recruiting during New Student Orientation, which it refers to as “Open Accounts Weekend.”

This year, White said that the credit union did relatively well in recruitment.

“We opened over 800 accounts over this past summer and during that weekend,” he said.

Representatives from Chevy Chase’s Leavey Center branch declined to comment on the competition with the credit union.

Aside from the competition that Chevy Chase brings, one thing will always differentiate the two: the management.

Gina Pizzitola (COL ’11), a customer of the credit union, said that, because it is student-run, GUASFCU provides a more personal experience than other banks.

“I didn’t choose it because it was student-run, but I really respect the fact that it is,” she said. “It feels much more personal, especially when you can go in and see people you know.”

– Hoya Staff Writer Courteney Lario contributed to this report.

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